Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc

In proceedings 2020/117824: Mr D Hooke SC / Mr S Hartford Davis (Plaintiff) Mr A Cheshire SC / Mr S Tzouganatos (Defendants)

Solicitors: In proceedings 2020/86229 and 2020/86263: Slater & Gordon Lawyers (Sydney) (Plaintiffs)

In proceedings 2020/117824: Rankin Ellison Lawyers (Plaintiff) Slater & Gordon Lawyers (Sydney) (Defendants) File Number(s): 2020/86229; 2020/86263; 2020/117824

Judgment

1. The legal personal representatives of the Estates of two employees who commenced proceedings in the Dust Diseases Tribunal of New South Wales (the claimants) seek orders under section 601AH of the Corporations Act 2001 (Cth) to reinstate the registration of employer companies and ancillary orders to validate the commencement of the Tribunal proceedings nunc pro tunc. The reinstatements and, more particularly, the ancillary relief are opposed by the companies' insurer, Allianz Australia Insurance Limited.
2. An initial issue arose in respect of privilege. The claimants read affidavits by their solicitor, Joanne Wade, who described the circumstances in which the Tribunal proceedings were commenced and the nature of the claims. On receipt of Ms Wade's affidavits, Allianz issued a notice to produce for inspection seeking production of file notes of the telephone calls described or written communications recording advice or instructions relating to the commencement of proceedings. The documents were produced and privilege claimed over some of the material.

Mr Fletcher and Austral Bronze

1. Barry Fletcher was employed by Austral Bronze Co Pty Limited from 1960 to 1963. On 26 September 1997, the company was deregistered.
2. In September 2019, Mr Fletcher was diagnosed with mesothelioma. On 20 December 2019, Mr Fletcher and his de facto wife, Kathleen Comerford, called a solicitor, Breanna Goodlock, who obtained an employment history from Mr Fletcher, including that he had been exposed to asbestos while working for Austral Bronze. Later that day, Ms Wade filed a statement of claim in the Tribunal against first defendant, described as "Austral Bronze Co Pty Ltd (Deregistered on 26 September 1997)". Given Mr Fletcher's parlous condition, Ms Wade was anxious to commence proceedings in order to preserve the entitlements of Mr Fletcher and his Estate to non-economic loss pursuant to section 12B of the Dust Diseases Tribunal Act 1989 (NSW). Although the proceedings nominated a company that had been deregistered, Ms Wade believed that the proceedings could subsequently be regularised by the reinstatement of the company in order to allow the claim against the company to proceed.
3. On 21 December 2019, Ms Wade met with Mr Fletcher and prepared a handwritten statement, which he signed. An amended statement of claim was filed that day to include a claim for damages under section 15B of the Civil Liability Act 2002 (NSW) in respect of the loss of his ability to care for his disabled daughter.
4. On 28 December 2019, Mr Fletcher passed away.

Mr Viksne and John Darlington

1. From 1969 to about 1979, John Viksne worked for Millard Caravans Pty Limited (later called John Darlington Pty Limited). On 20 May 2015, John Darlington was deregistered.
2. In July 2019, Mr Viksne was diagnosed with mesothelioma. On 17 July 2019, Mr Viksne's wife, Beverley Viksne, called Ms Wade and said that her husband's doctor had told her yesterday that Mr Viksne was suffering from mesothelioma and his condition was palliative. Mr Viksne was an inpatient at Liverpool Hospital. Mrs Viksne advised, "He was exposed to asbestos and inhaled asbestos during his working life for a number of his employers, as well as during a home renovation". Ms Goodlock was dispatched to Liverpool Hospital to gain further instructions but, due to Mr Viksne's deteriorating condition, Ms Goodlock was unable to speak to Mr and Mrs Viksne.
3. Ms Wade formed the view that proceedings should be commenced by Mr Viksne in the Tribunal without delay in order to preserve the right of Mr Viksne and his Estate to claim general damages. A statement of claim was filed that day against "John Darlington Pty Limited (Deregistered on 20 May 2015)". Although the proceedings nominated a company that had been deregistered, Ms Wade believed that this could be subsequently regularised by the reinstatement of the company. The next day, 18 July 2019, Mr Viksne passed away.

Submissions

1. Allianz submitted that the file notes or instruction sheets provided the basis for the matters of information and belief to which Ms Wade deposed in her affidavit and, by reason of section 122(2) and (3) of the Evidence Act 1995 (NSW), privilege was waived over these communications. Specifically, by reason of the telephone call received on 20 December 2019 referred to at [4] and Ms Wade filing a statement of claim "in accordance with Mr Fletcher's instructions", it is said that privilege has been waived over a typed file note of the telephone calls and the solicitor's initial instruction sheet completed by Ms Goodlock when attending on Ms Comerford. Second, by reason of Ms Wade's telephone call with Mrs Viksne set out at [8], Ms Wade formed the view described at [9] and is thus said to have waived privilege over the whole of the handwritten file note of the conversation with Mrs Viksne and not just the portions of the file note which have been produced.
2. Allianz relied on Bailey v Department of Land and Water Conservation (2009) 74 NSWLR 333; [2009] NSWCA 100 per Tobias JA at [132], where his Honour adopted the common law principle in Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529; [1981] 2 All ER 485 as good law under the Evidence Act, in particular, (emphasis mine) "…where the whole of a document is a privileged communication between legal adviser and client, the party entitled to claim that privilege cannot waive the privilege as to part of the communication but claim it with respect to the remainder if to do so would result in an unfairness. Either privilege is claimed with respect to the whole or waived as to the whole. The only exception to this would be where the communication dealt with two entirely different subject matters …".
3. The plaintiffs submitted that, whilst Ms Wade may have referred to part of conversation with Mr Fletcher and Ms Comerford or Mrs Viksne in her affidavits, that did not waive privilege in the entirety of the conversation. Further, Ms Wade's affidavit was not relied upon to prove the truth of what she was told but simply to prove the fact of the conversation. Ms Wade's affidavit did not go to the merits of the plaintiffs' claims but simply the initial instructions that the plaintiffs needed to, and wished to, commence the proceedings urgently. The plaintiffs submitted that there was no unfairness in limiting production to the portion of the file note which had been produced in unredacted form. It did not require disclosure of all of the instructions given of all of employment history nor all of the matter relating to what was in the statements of claim.

Principles

1. Client legal privilege is a fundamental common law right: The Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543 at 552-553. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers: Esso Australia Resources Ltd v Commissioner of Taxation (Cth) [1999] HCA 67; (1999) 201 CLR 49 at 64; Cantor v Audi Australia Pty Ltd [2016] FCA 1391 at [56]. As explained by Lord Taylor CJ in R v Derby Magistrates' Court; Ex parte B [1995] 4 All ER 526; [1996] AC 487 at 507: The principle … is that a [person] must be able to consult [their] lawyer in confidence, since otherwise [they] might hold back half the truth. The client must be sure that what [they tell their] lawyer in confidence will never be revealed without [their] consent. Legal professional privilege … is a fundamental condition on which the administration of justice as a whole rests.
2. At common law, a person who would otherwise be entitled to privilege may waive that privilege; "It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege": Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66 at [28]. And further, at [29]: What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large.
3. Under the statute, section 122 of the Evidence Act provides: 122 Loss of client legal privilege: consent and related matters … (2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120. (3) Without limiting subsection (2), a client or party is taken to have so acted if - (a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or (b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.
4. Notwithstanding the differences between the principle stated in Mann v Carnell and the statutory language, the principles articulated in Mann v Carnell "apply with equal force in relation to the statutory question": Expense Reduction Analysts Group Pty Limited v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303 at [32] per French CJ, Kiefel, Bell, Gagelar and Keane JJ. The challenger of the privilege bears the onus of demonstrating waiver of privilege: Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No 2) (2013) 306 ALR 384; [2013] FCA 1098 at [100].

Conclusion

1. The parties were content for me to review the unredacted documents. So far as Mr Fletcher and Austral Bronze are concerned, the confidential communications with Mr Fletcher and Ms Comerford disclosed in Ms Wade's affidavit concern the receipt of instructions sufficient to file a claim against Austral Bronze and the reason for commencing the proceedings urgently in circumstances when Austral Bronze was then deregistered. The fact that instructions were taken from Mr Fletcher about his employment history does not, without more, amount to waiver of privilege to the extent that those instructions went beyond his employment with Austral Bronze. Nor does it amount to waiver of privilege over all instructions on all subjects, albeit recorded in the same document. Having reviewed the record of the privileged communications, I am satisfied that there is no relevant inconsistency or unfairness between Ms Wade's affidavit and maintenance of privilege in the unredacted portion of the file notes made on 20 December 2019 or the initial instruction sheet.
2. So far as Mr Viksne and John Darlington are concerned, the handwritten file note of Ms Wade's telephone conversation with Mrs Viksne on 17 July 2019 indicates that the telephone call took about 25 minutes. Six pages of handwritten notes were taken, of which roughly half has been disclosed to Allianz.
3. The import of Ms Wade's affidavit - and the extent to which Ms Wade clearly waived privilege - is to disclose the instructions received which identified John Darlington as a relevant defendant (amongst other defendants); that there were material facts which founded a cause of action by Mr Viksne against that company in the Tribunal; and the need to commence proceedings urgently.
4. Having reviewed the portion of the file note over which privilege is claimed, I consider that the claim for privilege cannot be maintained as it would be unfair to do so given - not so much Ms Wade's affidavit - but the portions of the file note which have already been disclosed. There is an inconsistency between waiving privilege over the portions of the file note already provided to the insurer, and maintaining privilege over the remainder which creates an unfairness in the relevant sense.
5. The insurer indicated during the hearing that, to the extent that the claim for privilege did not succeed, the insurer tendered the additional material. Thus, I make the following orders and directions: 1. No person be given access to the following documents in MFI-3: 1. the unredacted portions of the file notes made on 20 December 2019, or 2. the initial instruction sheet containing confidential communications with Barry Fletcher, Kathleen Comerford and Slater & Gordon Lawyers (Sydney) other than Kathleen Comerford and Slater & Gordon Lawyers (Sydney) without an order from the Court. 1. The plaintiffs in proceedings 2020/86229 and 2020/86263 and defendants in proceedings 2020/117824 to advise the Associate to Rees J by 4.00 pm, 28 October 2020 whether they object to the tender of the complete file note of 17 July 2019, presently part of MFI-3, and if so, provide a short outline of submissions not exceeding 2 pages. 2. The plaintiff in proceedings 2020/117824 to provide any submissions in reply by 4.00 pm, 30 October 2020, not exceeding two pages.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 October 2020